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Borrowing Against A Traditional Insurance Policy Cheaper Than A Personal Loan: Vibha Padalkar Of HDFC Life

Team BankBazaar
·2-min read


The Covid-19 crisis has tremendously heightened various uncertainties. Adequate life and health insurance coverage are one of the few effective ways to safeguard one’s family’s finances against adverse possibilities such as hospitalisation or death. Your insurance plans lapsing would put your family’s finances at great risk. In these difficult times when every rupee counts, HDFC Life MD & CEO Vibha Padalkar and BankBazaar CEO Adhil Shetty discussed how consumers should think about protection when simultaneously worried about jobs, job loss, salary deduction, etc., in the latest LinkedIn Live Expert Speak event.

Padalkar recommended 3 options to handle the situation.

Option 1: If you already have insurance, don’t stop paying premiums under any circumstances. Instead, cutting back on discretionary spends or where you might have a moratorium and more time to pay, would be a wise decision. This is because there’s nothing worse than your income drying up during a calamity that befalls you or your family, at a time when you’re not adequately covered.

Option 2: Loan against policies. If you have a policy, especially a traditional policy for which you have been paying premiums for 3-4 years or more, you could consider borrowing against this. You can borrow over the counter and it is cheaper than a personal loan. You can repay it the following months, when you get another job, arrears, and so on.

Option 3: If you have a loan, even if you don’t have a personal term cover, cover that at least on a group scheme, under credit life. This is an easier option because for higher age gaps, medical examination will be required. “Buy health policy if you can because while the death rate is much lower, obviously, but chances of contracting Covid are high. So at least see whether your health can be covered.”

#ExpertSpeak LinkedIn Live events occur every Thursday, where BankBazaar CEO Adhil Shetty invites industry experts in the finance space to talk about money management, investment, and more, especially in the backdrop of Covid-19.